By Mark Rolton
What I love about Property Options the most is the fact that there is no risk. The greatest tycoons of our time know the power of control instead of ownership. With control we own the profits of real estate, but not the pitfalls. This is where Property Options come into their own realm.
Today, there are more opportunities than ever before. Liquidated stock, desperate vendors and developers offloading sites everywhere. The beauty of an Option is that we control the asset with the view to gain time. With that time (24 months) we have a number of ways we can produce enormous profits.
Firstly, the key to securing the property under Option is by offering a little more than the current market price in exchange for time. This way we’re not trying to ‘crunch’ the seller on price, we’re in fact offering them over and above the market. At this point the seller is more than happy and with the value of time, we have two immediate ways in which we realise our profits:
1. On-selling the property to the market, highlighting that the future purchaser has 24 months to settle. In that period the market would have improved considerably and this way you get to redeem your profits the minute you assign the Option over to them. Without ever settling on the property yourself...
2. Or, you can “force value” upon the property instantly by doing a renovation or undertaking a development approval and then on-selling without ever being the physical owner. Even though the latter does require a small injection of capital, the greatest benefit is that we don’t have all the headaches of financing the purchase, credit checks, applications, deposits required and then servicing the debt each month.
How can I be sure that I’ll be able to on-sell it at a profit?
The answer here lies in the fact that most seasoned real estate investors understand the value of time. If a property doubles every 7-10 years, doesn’t it make sense to secure some of that improved value without the cost? And when you engage a real estate agent to on-sell, have them detail to the prospective buyer that they can wait for the market to improve. Potentially even co-ordinate the renovation, construction, finance or even pre-sales of a development project in that time frame.
Time is in fact the most prized commodity in real estate and the New Rich use this knowledge to tap profits formerly known to the tycoons.
It’s here that we find the incredible profits of real estate without the challenges of owning. When cash is king you want the strategy that extracts the greatest return without the exposure.
Mark Rolton is not just a peak performing dealmaker, but an ultra effective property mentor and coach that now has a vested interest in your success.
www.propertyoptions.com.au
